Channel 4 handed millions in bonuses as TV ad market falters amid coronavirus

theguardian | April 06, 2020

At a Glance:

  • Channel 4 has handed millions in bonuses to staff as it contemplates the cost-cutting measures to cope with the hit to ad revenue caused by the coronavirus pandemic.

  • Channel 4 will announce this week a range of cost-cutting measures for this year, one of which includes a temporary 20% reduction in the salary.

  • Channel 4 is under particular pressure during the coronavirus crisis as its £1.1bn in annual revenues is derived almost entirely from advertising.

Channel 4 has paid out millions in bonuses to bosses and staff while opening talks with the government about potentially tapping an emergency £75m credit facility as the coronavirus hammers the TV industry.

The broadcaster, which is publicly owned but funds itself mostly through TV advertising, is estimated to have paid out more than £5m to its 903 staff last month.

The payouts, which include hundreds of thousands of pounds in bonuses each to the chief executive, Alex Mahon, the director of programs, Ian Katz, and the commercial boss, Jonathan Allan, relate to the performance of Channel 4 last year.

It is understood Channel 4 will announce this week a range of cost-cutting measures for this year, one of which includes a temporary 20% reduction in the salary of the executive team and board.

If Channel 4 follows the measures announced by ITV last week, which appears likely, top executives will give up bonuses for this year while staff can expect, at minimum, a pay freeze. It is understood ITV is looking to furlough some staff, and Channel 4 may be forced to do the same.

The 2019 bonus payouts have come at a politically sensitive and commercially dire time for Channel 4.


Learn more: Digital billboard brand marketing budget & strategy

The broadcaster said it was committed to making the bonus payments last month in its February payroll, which was when advertisers in travel-related sectors began to pull TV advertising as the coronavirus spread. At the beginning of March, ITV warned investors of a significant slump in TV ad spending due to the coronavirus.

Later in March, Channel 4, which had about £180m in cash reserves according to the last publicly available figures, raised the prospect of tapping the £75m credit facility during a regular meeting with officials from the Department of Digital, Culture, Media, and Sport and the Treasury. Channel 4 set up the facility in 2018 as a financial backstop for exceptional circumstances.

Learn more: Channel 4 Annual Report 2018 - FINAL

“Channel 4’s variable pay award for 2019 was agreed by the board in January, reflecting the strong progress made last year against corporate objectives,” said a spokesman for the broadcaster. “The award was communicated to all staff in January and was committed through the payroll system in February.”

The bonus awards range from a maximum of 10% of gross salary for a typical staff member to 20% for the head of the department and 50% for the broadcaster’s executive team. It is understood that last year’s payouts failed to hit the maximum award.

Channel 4 is under particular pressure during the coronavirus crisis as its £1.1bn in annual revenues is derived almost entirely from advertising.

According to industry sources, the broadcaster is facing a slump of more than 40% in TV advertising in the second quarter. ITV and Sky, which have more diversified income from TV production and pay subscriptions, are on track for declines of 37% and 34%, respectively. ITV has said that by year-end each 1% decline in advertising revenue it fails to recover post-coronavirus will reduce revenue and profit by £17m.

Spotlight

Jennifer Renaud, Oracle Marketing Cloud sits on theCUBE at Oracle Modern Customer Experience #ModernCX - #theCUBE.

Spotlight

Jennifer Renaud, Oracle Marketing Cloud sits on theCUBE at Oracle Modern Customer Experience #ModernCX - #theCUBE.

Related News

ADVERTISER CAMPAIGN MANAGEMENT

WPP and Instacart Partner to Accelerate Online Grocery Advertising for CPG Brands

WPP | February 01, 2022

WPP and Instacart, the leading online grocery platform in North America, today announced a new partnership offering advertising solutions and measurement tools for CPG brands. The first of its kind partnership will give WPP and its clients early insight into Instacart Ads product offerings and access to new tools and features on the platform. With the largest footprint across the CPG category globally, WPP recognized the importance of building advanced retail and commerce capabilities early on. The partnership with Instacart Ads, which offers a robust suite of advertising products, reflects WPP’s commitment to lead the market by delivering advanced, end-to-end commerce solutions that allow brands to thrive in online environments. As the inaugural Analytics API partner, WPP will gain access to a custom analytics API and data integration tool that enables WPP agencies to develop unique insights for clients, including basket analysis and lifetime value. The partnership will also include custom campaign measurement and management indexes to ensure clients can optimize spend and sustainable growth on the platform. Additionally, the companies will co-develop the first Instacart Ads agency certification program designed to provide teams with an advanced level of proficiency across Instacart’s app and products. As part of this commitment, WPP and Instacart Ads will collaborate on the learning agenda and content, and WPP teams will gain access to the certification program before it is launched to the general market. WPP has committed to having 1,000 employees certified by the program within the first six months of launch. The pandemic has rapidly transformed the way people shop and what they expect from brands online. This behavioral shift means we need to use cutting-edge advertising tools for brands that now need to connect and engage with their consumers across all channels. We are delighted that our new partnership with Instacart Ads will allow WPP agencies to deliver even more innovative solutions to clients that enhance the online grocery shopping experience.” Doug Chavez, Vice President of Strategic Partnerships at WPP About WPP WPP is the creative transformation company. We use the power of creativity to build better futures for our people, planet, clients and communities.

Read More

BRAND MARKETING

Instagram is Letting Advertisers to Publish Sponsored Posts from Users

Instagram | November 27, 2020

Instagram is giving advertisers to distribute supported posts from users' records through an update to branded content ads. Branded content advertisements were presented a year ago as a path for influencers to recognize when their posts are sponsored by a company or brand. The ads look simply like organic posts distributed from the user’s record, just they have a tag reading: “Paid partnership with [brand name].” Making the ads required a lot of coordination between the influencer and the brand. The content had to be published as an organic post first, and then the brand would experience Instagram to promote the post as an ad.

Read More

AD NETWORKS

OneSmart International Education Group Announces ADS Ratio Change

OneSmart | January 17, 2022

OneSmart International Education Group Limited ("OneSmart" or the "Company") (NYSE: ONE) today announced that it will change the ratio of its American depositary shares ("ADSs") representing its Class A ordinary shares from one (1) ADS representing forty (40) Class A ordinary share to one (1) ADS representing one thousand (1,000) Class A ordinary shares. For OneSmart's ADS holders, the change in the ADS ratio will have the same effect as a one-for-twenty-five reverse ADS split. There will be no change to the Company's Class A ordinary shares. The effect of the ratio change on the ADS trading price on the New York Stock Exchange (the "NYSE") is expected to take place at the open of trading on January 24, 2022 (U.S. Eastern Time). ADS holders of record on the effective date will need to surrender their ADS to the depositary bank for cancellation and exchange in connection with the ADS ratio change, with further details to be provided in the notice by the depositary bank. The exchange of every twenty-five (25) then-held ADSs for one (1) new ADS will occur automatically with the then-held ADSs being cancelled and new ADSs being issued by the depositary bank, in each case as of the effective date for the ADS ratio change. OneSmart's ADSs will continue to be traded on the NYSE under the symbol "ONE". No fractional new ADSs will be issued in connection with the change in the ADS ratio. Instead, fractional entitlements to new ADSs will be aggregated and sold by the depositary bank and the net cash proceeds from the sale of the fractional ADS entitlements (after deduction of fees, taxes and expenses) will be distributed to the applicable ADS holders by the depositary bank. As a result of the change in the ADS ratio, the ADS price is expected to increase proportionally, although the Company can give no assurance that the ADS price after the change in the ADS ratio will be equal to or greater than twenty-five times the ADS price before the change. About OneSmart Founded in 2008 and headquartered in Shanghai, OneSmart International Education Group Limited currently provides non-subject based tutoring to students in China. Given the “Policy to Further Reducing the Burden of Homework and Off-campus Tutoring for Compulsory Education Students,” (the “Double Reduction Policy”), which basically requires suspension of all subject-based off-campus tutoring business targeting pre-school kids and K12 students, the Company plans to provide online education and tutoring services exclusively to students outside of China, overseas education preparation and consulting services to students residing within China, “Smart ID Card” to campuses and develop and market smart training system incorporating virtual reality, artificial intelligence, blockchain and other technologies in order to facilitate the teaching and training process.

Read More